Shane Ross

The €690,000-a-year survivor of the B of I's disgrace must be shaking in his shoes. An outsider has been appointed to change the culture. Boucher, a survivor of the ancien regime of high salaries, juicy options and dodgy behaviour, will need to smarten up his act.

Worse still for Boucher, the external invader comes from Scotland. There will be no tolerance of the old extravagance, the days of overcharging customers will be over. The benign vigilance of Governor Pat Molloy, the house-trained B of I lifer, is ended. The laissez-faire reign of deposed Governor Richard Burrows is a distant memory. Instead, a thrifty Scot, an independent governor -- a man seemingly without baggage, -- has finally arrived.

The Bank of Ireland has pulled a coup. A few weeks ago it announced the name of the new Governor. A virtually unknown banker by the name of Archie Kane had been parachuted in from Lloyds TSB.

Archie Kane may not be known in Ireland, but he is well-known in some areas of the UK banking industry. He does not carry any Irish baggage. Instead, he carries UK baggage galore.

Bank of Ireland issued the usual press release. It made Archie sound as dull as ditch water. It sent the media to sleep with the soporific message.

"Archie Kane retired from Lloyds Banking Group where he was Group Executive Director -- Insurance and Scotland in May 2011. Prior to that, he held a number of senior and general management positions with Lloyds Banking Group and TSB Bank plc."

Yawn.

Just to anaesthetise the remaining antennae of anyone reading the script, it went on to describe Archie as a chartered accountant with a degree in accountancy from Glasgow. He was chairman of the Association of British Insurers etc. His CV will prove useful as a cure for insomnia.

Just what the B of I needed: a total pain to dampen all the unwelcome excitement at the B of I in recent years. Governor Archie, the thrifty Scot from Lloyds, ticks all the boredom boxes.

Last week, with Archie just a week into the €390,000-a-year job, it was time to take a closer look at the man chosen to protect the interests of those of us who are long-suffering shareholders of the bank. Indeed, the same Archie carries a heavy responsibility to Irish taxpayers, because the State still owns 15 per cent of Bank of Ireland.

A little digging does not soothe the soul. It is deeply disturbing. The news from Scotland about Archie was not reassuring.

Richie Boucher will be delighted to learn of the type of paydays Archie has enjoyed over the last 10 years as a director of the ailing Lloyds Bank. But even Richie might wonder why Archie left Lloyds last year, seemingly at the height of his earning power.

Richie might wonder how Lloyds was prepared to lose a man of such talent, whom it had rewarded for a decade with the sort of outlandish take-home pay that would make Michael Fingleton blush. Yet Lloyds let him go.

On March 1, 2011, a new chief executive, Antonio Horta-Osorio, arrived in Lloyds from Spain's Santander Bank. Within weeks, long-time Lloyds insurance boss Kane and its retail boss Helen Weir had retired. Reuters described the speed of the departures as a "boardroom cull". The Mail Online said Kane had been "shown the door".

Kane's insurance division had been regarded as a moderately successful arm of the troubled bank, justifying his sky-high bonuses during his 10 years in the boardroom. Yet just a month after he left Lloyds, a landmark court case found that Lloyds and other banks were liable for vast compensation payments to clients who were victims of mis-selling of insurance policies.

The offending policy was known as Payment Protection Insurance (PPI), a product designed to compensate vulnerable borrowers who lose their jobs or become too sick to work. PPI was a paradise for unscrupulous sales people. Tens of thousands of Lloyds clients were victims.

Lloyds was the worst PPI sinner of all the UK banks, although the mis-selling scam was widespread.

Lloyds threw in the towel. The new chief executive decreed that the bank must set aside £3.2bn to pay compensation to customers who were victims of the mis-selling. The bank was forced to declare a loss of over £3bn for the year.

The bank never suggested that Kane had deliberately mis-sold PPI products. Yet nine months after he left, in February this year, it made a dramatic announcement. The Daily Telegraph carried the story: "Lloyds Bank strips 13 directors of more than £2m in bonuses".

Among the five executive directors stripped of their 2010 bonuses was Archie Kane, now governor of the Bank of Ireland. It was the first ever clawback of its kind. The reason given was the bank's role in the mis-selling of PPI.

Kane and three others were ordered to surrender 25 per cent of their 2010 bonuses. Kane had received a bonus of £767,000. He was compelled to forgo £190,000 of it.

The bank was at pains to point out that "the decision is based entirely on the principle of accountability and in no way on culpability or wrong-doing by the individuals concerned".

Of course Archie was not to be blamed for any of the £3.2bn losses that Lloyds was forced to take as a result of the activities of the overzealous insurance workforce. No, instead, he was being held partly "accountable".

The loss of £190,000 will not cost Kane a second's sleep.

Kane has been on the gravy train for at least 10 years. His pay package rose from £474,000 in 2000 to a massive £1.4m in 2010. His performance pay soared from his first year's £130,000 to £767,000 (more than his basic salary) in 2010. During that whole decade he only missed a performance bonus once, in the doomsday period of 2008. His total takeout from Lloyds -- during a disastrous period for a bank that was bailed out by the British government -- exceeded £10m (€13.457m). Over that period, the share price tanked.

Last week I asked B of I for details of how on Earth the good Governor Kane was recruited. After mutterings about a recruitment firm making selections, about the interviews and the nomination committee, they refused to give me any details of the process, referring me to the annual report.

The Minister for Finance Michael Noonan was merely "notified" of Kane's appointment. In recent years Noonan and his predecessor, Brian Lenihan, have kept Bank of Ireland afloat with taxpayers' money. He has been rewarded with the two-finger sign from the bank and a courtesy call from Kane.

The appointment of Kane is a banker's response to the sacrifices made by the people of Ireland to rescue the Bank of Ireland. The board has delivered the ultimate insult, confirmation that in Ireland the banker is still boss.

From the board's point of view they made the ideal choice. Governor Kane will fit in perfectly with the prevailing culture at the Bank of Ireland and the deteriorating standards at the Central Bank. Although he is one of the first bankers ever to have been forced to return a bonus, he is still up there with the best of the £10m plutocrats.